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Agile Businesses: Matt Wallace Of Faction On How Businesses Pivot and Stay Relevant In The Face of Disruptive Technologies

An Interview With Fotis Georgiadis

As Chief Technology Officer, Matt is responsible for product development, managed and professional services, and architecting Faction’s cloud infrastructure offerings. Prior to Faction, Matt worked 20 years in technology roles at both startups and Fortune 500 companies, including leadership roles at Level 3 Communications, ViaWest, and Exodus Communications, among others.

Matt is the co-author of “Securing the Virtual Environment: How to Defend the Enterprise Against Attack”, one of the first books to holistically address cloud security concerns. Matt attended the University of California at Santa Cruz and is an official member of the Forbes Technology Council.

Thank you so much for joining us in this interview series. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?

I first got my hands on a computer when I was 8, and taught myself writing BASIC from a manual. I dabbled a lot throughout childhood, and while in high school I had a mentor who ran an engineering team at Sun Microsystems, and I helped him with his side business, which was custom PCs. I was fairly sure I was going to write novels, be a lawyer, or focus on business until I started college and had a real Internet connection. I quickly became convinced that the Internet was going to change everything, in an era where even dial-up Internet accounts were still extremely rare.

I ended up starting at a tiny company called Exodus Communications, but it became one of the absolute behemoths of the tech boom. The team I spent most of my time on ran security services, but I was pushed relentlessly by mentors to become broadly versed in everything from networking to systems to code as well. We built many things for ourselves for automated deployment, version control, monitoring, and high availability that were miles ahead of vendor products, if they existed at all. My playful but extremely competitive peer group kept each other on our toes.

A former colleague later recruited me to VMware, and that experience pushed me beyond pure engineering. I wanted to see talented engineers not just doing great work, but doing it on the right things. I still think of myself as a builder, but I’m passionate about the vision for the future and enabling teams to create things that matter. Life’s too short to waste our time on the wrong things.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?

I’m grateful for a series of mentors that have helped me grow — from Jim Lovewell, who taught me a lot about hardware when I was still in high school, and hosted me as an intern at Sun Microsystems; to Mike Myers at Exodus who was a technology renaissance man who seemed to know everything and pushed me, and many others, to learn more — usually by doing. He had a remarkable talent for giving you things that were incredible stretch efforts.

These were remarkable because they really forced me to grow outside my comfort zone, but one thing I’ve realized now is that almost everyone has something to teach you. Being hungry and humble is great advice because it sets you up to learn. That environment was highly competitive but in a friendly, collaborative way.

Thank you for all that. Let’s now turn to the main focus of our discussion. Can you tell our readers a bit about what your business does? How do you help people?

Faction is a multi-cloud data services company. Many modern businesses with strong digital initiatives are multi-cloud by necessity, design, or both. Data is the lifeblood of their business, and we make the same copy of data available to all their cloud environments, and those of key partners, at once — without moving or copying it. This allows them to innovate faster, scale larger, and simplify operations and governance, all while achieving lower costs.

A great real-world example is how we enabled the construction of a multi-cloud supercomputer, built solely from spot instances across all the public clouds, allowing massive parallel processing of genomic data on cloud GPUs. The model for doing this work improved performance and could result in cost savings of over 75% versus more traditional ways of doing things.

Was there a specific “a-ha moment” that gave you the idea to start this new path? If yes, we’d love to hear the story.

Faction had already built our first multi-cloud data service offering, but we were well known for our private cloud services, and we knew that our existing typical customer was not ideal for a multi-cloud data service. We wanted to make inroads with larger enterprises with larger data sets, who would benefit dramatically from our multi-cloud offering.

Our first big pivot started with the “a-ha” that as VMware launched their flagship cloud service, VMware Cloud on AWS, the initial hardware type wouldn’t have enough storage capacity. We worked with VMware to build an integration from VMware Cloud to our platform, which solved that capacity problem. Our prediction was right, and our solution moved us firmly into Fortune 500 & Global 2000 business, and also led to our investment by Dell Technologies Capital and our partnership with Dell.

That drove further innovation in our platform, and our second big pivot — we partnered with Dell to launch a set of multi-cloud data services that combined Faction’s multi-cloud platform with the capabilities of Dell’s hardware platforms, where they were and are a clear market leader. Dell was a leader in systems for unstructured data, and customers with petabytes of unstructured data were exactly the type of customers who would benefit the most from what Faction could do for multi-cloud architectures.

So, how are things going with this new direction?

Really well. Getting in front of the leadership at a Fortune 100 enterprise, and hearing that your product is “amazing” or “magical” is about as good as it gets for a technologist like me. Knowing that the impact is in millions of dollars saved, or even better, lives saved through accelerated research and improved patient care, means I get excited for Monday mornings.

What would you say is the most critical role of a leader during a disruptive period?

I think helping your team understand the motivation, the vision, and what is expected of them during a pivot is critical. Uncertainty and fear slow your efforts and hurt morale; by contrast, clarity and excitement for a new direction can rally a team to tackle a challenge. A pivot means adding a bunch of unknowns, but with the right context, it can be taken as the adventure that it is.

When the future seems so uncertain, what is the best way to boost morale? What can a leader do to inspire, motivate and engage their team?

I think the best thing is to connect all the dots. Your team needs to know what you want to accomplish and why — both why it is good for the market, your customers, or the world; and why it is good for the business. Then you need to make clear the role they play in that transformation, and help them understand their own opportunities to grow and accomplish things.

Is there a “number one principle” that can help guide a company through the ups and downs of turbulent times?

Perhaps the most important thing is that you must become comfortable with uncertainty. To paraphrase Colin Powell, leadership happens between 40 and 70% certainty. If you are operating in tumultuous times, you sometimes have to make significant decisions when you have imperfect information. You can’t just guess, but the right decision made too late can be just as bad as the wrong decision. This goes hand in hand with fostering a culture where open communication — especially raising possible problems — is known to be virtuous. And of course — celebrate failure as a learning experience. You have to encourage risks if you want people to take them — and you should.

Can you share 3 or 4 of the most common mistakes you have seen other businesses make when faced with a disruptive technology? What should one keep in mind to avoid that?

First, a lot of truly disruptive technology is dismissed because it is too foreign from the status quo. You hear things like, “People will never do that!” But things with compelling fundamental value and clear growth are rarely truly fads. An obvious recent example is the cloud. The denial of its value, growth, and longevity took many forms, while trillions of dollars in value was created. I expect this to play out again with augmented reality, machine learning, and robotics in the coming decades.

Second, if it’s disruptive but not directly to your product, too many organizations either adopt technology for technology’s sake, without tying it back to business value; or they over-extend to adopt it when it requires too much effort and integration. Start with business value, and try to avoid straying too far from your core competencies when you are building complex things.

Third, I’ve seen a failure to really socialize and articulate disruptive technology. Some technology requires a complementary change in organizational behavior, and implementing a technology but failing to complete the swing on the human aspects can waste or delay a lot of the value.

Ok. Thank you. Here is the primary question of our discussion. Based on your experience and success, what are the five most important things a business leader should do to pivot and stay relevant in the face of disruptive technologies? Please share a story or an example for each.

Try to find the strengths you have that bridge from what you do today into what you need to pivot to.

Don’t think in absolutes — when you start to pivot, nothing is certain; try to think in terms of how likely certain outcomes are, and whether success or failure is a matter of degrees. Does partial success help you? Think ahead to how your business landscape will be different either way.

Always ask yourself what you’d be afraid of a competitor doing. If you can identify it, and it is possible, you should probably be looking at doing it.

Remember that major disruption often happens as things progress from being customized to standardized to commoditized. As different technologies go from bespoke and expensive to standardized and cheap, the ways they are leveraged radically disrupt adjacent technologies. Some of them — like the cheap, fast, distributed connectivity of the Internet — disrupt almost everything.

Don’t overthink things — you have to stay agile in the face of disruption. Remember the 40/70 rule; if you’re less than 40% certain you’re more guessing than leading change, but if you’re more than 70% certain you’re probably overanalyzing and further certainty comes at too high of a cost of agility.

Thank you so much for sharing these important insights. We wish you continued success and good health!



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